British Airways has dropped its bid to take over Iberia, but said the Spanish carrier will remain a key partner.
BA holds a 10% stake in Iberia and revealed six months ago it had joined a consortium – including private equity group TPG Capital – that would consider buying the airline, although BA said it would not put up any capital for the deal.
However, it announced on Monday it would not exercise its option to buy a further 30% stake from Spanish firms and Iberia shareholders BBVA and Logista after the pair said they wished to sell to Spanish bank and fellow shareholder Caja Madrid.
The proposed £2.5 billion takeover has foundered on opposition from Caja Madrid, which has increased its own stake and opposed a BA bid fearing it would undermine growth at Madrid’s Barajas airport.
BA chief financial officer Keith Williams said: “BA’s position as Iberia’s partner remains important and is not dependent on an increase in shareholding. We will enter discussions with Caja Madrid to maximise the value of our relationship with Iberia.”